Gas station operators have say on Coon Rapids prepay proposal

Almost all Coon Rapids gas station owners/operators made it clear Tuesday night that they did not like the proposed ordinance mandating the prepayment of gasoline and diesel fuel at retail fuel businesses in the city.

They and several residents spoke at a Coon Rapids City Council work session Jan. 24, and almost all were opposed to the ordinance.

The ordinance, which if adopted would make Coon Rapids the first community in Minnesota to mandate prepayment of gasoline, was tabled by the council on a 4-3 vote at its Dec. 6, 2011 meeting for further discussion at the work session.

But the council wanted to hear more than just opposition to the proposal; it wanted to hear ideas from the gas station owners/operators on how to deal with the theft of gas issue.

And ideas were presented in the two-hour session after which Mayor Tim Howe thanked those who spoke for their civility and for their ideas.

However, councilmembers did not comment on what they had heard.

Instead, that will come when the council takes up the tabled ordinance again at its Tuesday, Feb. 21 meeting.

The Coon Rapids Police Department proposed the ordinance because the number of no pays from gas stations, which constitutes theft, has been growing and it has had a negative impact on the city’s crime rate.

According to Police Chief Brad Wise, cities in other parts of the country have established similar ordinances with positive results, as well as the province of British Columbia in Canada.

Wise called the ordinance a crime prevention tool, a way to reduce crime.

Larceny or theft, including theft of gas, is classified as a class 1 crime along with murder, burglary, robbery, aggravated assault, motor vehicle theft and arson.

In 2010, the city had 2,854 class 1 crimes and 2,467 were thefts, Wise said. And of those 2,467 thefts, 492, or nearly 20 percent, were fuel thefts, he said.

Of those 492 reported cases, there were only seven citations written because positive identification has to be made of the person pumping the gas and then driving off; a license plate number is not enough, Wise said.

And when Coon Rapids’ crime statistics are compared with the national average, the only class 1 crime which exceeds the average is theft, according to Wise.

In 2011, the number of no pays was 481 with 10 citations being written and of those no pays, 75 of the vehicles had stolen license plates, Wise said.

“The intent of this ordinance is to reduce crime,” he said. “It is placing a burden on the limited resources of our department.”

It is not the intent of the ordinance to hurt the business of the gas stations in the city, Wise said.

“We want you to be successful,” he said.

But many gas station operators said that a prepay ordinance would have a significant negative impact on their business as well as be an inconvenience to customers, who would likely take their business to a neighboring community that does not require prepay.

The increase in credit card use caused by a prepay ordinance would increase business costs because each time a credit card is used there is at least a 2 percent fee plus a transaction fee, the council was told.

One gas station owner estimated that the increased credit card fees would cost him some $200,000 a year, a lot more than the loss through no pays.

Rick Dehn, who was born and raised in Coon Rapids and is the owner of Dehn Oil Co. as well as the Marathon station at Northdale and Foley boulevards, is a member of the board of the Minnesota Petroleum Marketers Association, which has had bills introduced in both the Minnesota Senate and House this session to change the language of the drive-off law.

Instead of having to call police when there is a theft of gas incident, the clerk/cashier will make note of the make, model and license plate of vehicles at each pump before allowing the driver to pump gas, according to Dehn.

Then if there is a no pay, the employee will certify and sign an affidavit and a notice of non-payment will be sent to the owner of the vehicle, Dehn said.

If the owner has not paid or responded within 30 days, only then will be police become involved, Dehn said.

Dehn is optimistic the legislation will pass the Legislature this session and go into law May 1, he said.

“We have support from both parties,” Dehn said.

In addition, a large number of the gas station owners and operators met Jan. 13 to discuss other ways of dealing with the no-pay issue, besides the legislation, and a number of ideas were brought forward, according to Dehn.

He asked the council not to act on the ordinance until the “working group” had a chance to come up with some solutions to reduce the theft from gas crime rate in Coon Rapids, Dehn said.

And Dehn invited representatives from the police department and council to sit in on the meetings if they wished.

The council heard the same message from Brad Fogarty, representing Kwik Trip, which has a station at Coon Rapids Boulevard and Springbrook Drive.

According to Fogarty, Kwik Trip’s credit department has access to Minnesota Department of Motor Vehicle records and has been sending no-pay letters to offending drivers.

Most of the gas station operators/owners were represented at the Jan. 13 meeting and were on the same page in finding ways to curb no pays, including the legislation, Fogarty said.

For example, gas station owners operators can monitor troublesome pumps and make the pumps farthest away from the building that don’t have visibility prepay, he said.

In addition, gas station operators will evaluate surveillance at their locations and make sure employees are closely monitoring customers using the pumps, Fogarty said.

For example, cashiers/clerks will be asked to identifying the vehicle verbally when they are giving the driver permission to start pumping, he said.

Fogarty asked the council “to temper their passion with prudence and patience,” he said.

According to Fogarty, the working group has held off on setting a second meeting date until it sees what action the council takes.

Resident Walt Braunig also presented an idea to the council.

In his view, the mandatory pre-pay ordinance would “chase away some of the customers,” said Braunig, who prepays for his gas at the pump.

According to Braunig, technology exists for gas stations to give customers who don’t want to prepay with a credit card the option of swiping their driver’s license at the pump before starting to pump gas and then go in and pay.

Another gas station operator said that the police department in two other cities where he has stations have told him not to report no pays because officers won’t respond.

“There is not a level playing field when it comes to the crime rate,” he said.

Asked by Councilmember Bruce Sanders why some Holiday stations are prepay in some communities and not in Coon Rapids, Dave Hoeschen of the Holiday company said that there are 100 percent pre-pay Holiday locations in what he called “problematic areas.”

Another gas station operator said this was not a “competitive issue.”

“All stores have a common goal to reduce theft and crime,” he said,

But not everyone opposed the ordinance. Jerry Charmoli, owner of the Mobil station at Hanson and Northdale boulevards, said it is needed to cut down the drive offs and the loss that causes his business.

And Charmoli doubted that the Legislature would pass a bill this year, he said.

Resident Bill Hammes also spoke in favor of the ordinance.

He recalled that 30 years ago he was living in San Diego, Calif., and was surprised to find all gas stations were prepay, Hammes said.

“It only took us a month to adapt and it was no big deal,” he said.

Responding to the number of thefts of gas puts an unnecessary burden on the police department, Hammes said.

At the Dec. 6 meeting, Sanders presented a proposed amendment to the ordinance, an exception paragraph if a business enters “into a civil agreement with customers, pursuant to which customers may activate a fuel pump prior to payment through the use of a card or similar device, issued by the business owner that activates the pump, such an agreement shall include identifying information of the customer that may be used by the business owner for seeking compensation in the appropriate civil court should the customer fail to pay for fuel after activating the pump with such a card.”

That amendment is part of the ordinance that will be back on the agenda for the Feb. 21 council meeting.